MPC retains interest rate at 14%

MONETARY Policy Committee (MPC) on Tuesday retained benchmark interest rate at 14 percent.

At its second meeting in 2018, which started on Monday, the committee also declared current economic growth as fragile and urged fiscal authorities to continue to provide stimulations for it while devising new policy reforms.

Reading the communique of the meeting in Abuja shortly after the meeting, Governor of Central Bank of Nigeria (CBN) who is also Chairman of MPC said members expressed satisfaction at the growth trajectory especially because it was driven by both manufacturing and non-manufacturing sectors.

It also urged CBN to continue to sustain the growth recorded in the foreign exchange reserve position, which stood at close to $48 billion.

In view of increasing prices of crude, MPC asked Federal Government to build buffers against oil price shocks and be wary of sharing every available revenue at month federation account allocation committee meetings.

While urging the government to continue to prioritise payment of debts owed to contractors, MPC however, called for caution in injecting funds into the economy so as not to escalate inflation, which has been on a downward trend.

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Emefiele, while answering questions said the recent $2.5 billion currency swap agreement with China will be to the benefit of Nigerians as it will eliminate the interference of a third party currency in transactions between the two countries.

He said that with China being Nigeria’s largest trading partner, accounting for 35 percent of its foreign trade, the currency swap will have the salutary effect on businesses and consumers.

The CBN Governor said in addition to retaining Monetary Policy Rate (MPR) at 14 percent, MPC also retained other rates such as Cash Reserve Ratio (CRR) at 22.5 percent; Liquidity Ratio at 30 percent and Asymmetry Corridor at +200-500 basis points around MPR.